Perry's Cancer Prevention Research Institute Comes Under Continued Controversy

The Texas Enterprise Fund. The Emerging Technology Fund. And now, the Cancer Prevention Research Institute of Texas fund. Together, these three state accounts make up just some of the ways that Governor Perry and Texas lawmakers distribute $19 billion in business incentives every single year.

These three accounts are controlled by Rick Perry and his appointees, and each has come under considerable scrutiny for directing taxpayer dollars to Perry's donors. Texas should always invest in a strong economy that creates jobs, but we should never be forced to subsidize Rick Perry's corporate contributors.

The Cancer Prevention Research Institute of Texas (CPRIT, for short) is the most recent to come under fire. Last week, Progress Texas PAC called on the Texas Public Integrity Unit and Travis County District Attorney to investigate the management of CPRIT and Perry's other major funds. Governor Perry was quick to lash out and call the scrutiny the work of "conspiracy theorists" -- but only hours later, news broke that CPRIT awarded an $11 million grant contract without the required review. At the end of the week, it was discovered that CPRIT e-mails about the questionable contract were missing, prompting further calls for investigations. This is the latest in an ongoing scandal that has involved Nobel Laureates quitting and scores of staff resignations.

The Dallas Morning News' investigatve repoters, led by James Drew, have done excellent work digging into the CPRIT controversy. Below is an overview of their reporting, as well as some others' work, focusing heavily on recent developments over the past week. If you haven't yet, please take action and sign our petition to end Perry's corporate gifts.

Peloton, which hopes to have its BioCenter labs running by spring, has received an $11 million grant from the Cancer Prevention and Research Institute of Texas and a total of $18 million in early financing from two investment firms and Dallas philanthropist Peter O’Donnell Jr. [...]

Another concern is that one of the early Peloton investors is Dallas philanthropist Peter O’Donnell Jr., a major donor to the UT System and UTSW. “We’re walking on thin ice because there is potential to foul up what has been a wonderful relationship, which is something we do not want to do,” McKnight said. “We have to be ultra-, ultra-careful.” O’Donnell has invested about $3 million in Peloton, McKnight said.

Dr. Alfred Gilman, a Nobel Prize winner and top scientific officer for the state’s cancer-fighting agency, said he was told to resign after he objected to what he saw as political interference in the $3 billion program, according to documents obtained under Texas’ public information act.

[...]

His public resignation letter had made veiled references to political pressures, but the internal documents obtained by The Dallas Morning News paint a far starker picture of tensions between Gilman and Bill Gimson, executive director of the Cancer Prevention and Research Institute of Texas, or CPRIT. The records are the first detailed evidence of infighting within a small state agency that has received little scrutiny, even as it distributes millions of dollars in public money for cancer research.

June 1, 2012 - The Dallas Morning News published an e-mail exchange between the top scientific advisor, Gilman, and Jerry Cobbs, CPRIT's Chief Commercialization officer. The two would later be at the center of the deleted e-mail controversy, and the $11 million grant given without review. In the back-and-forth, the two have a strong disagreement over how money is rewarded, and how the entire CPRIT application works. I've exceprted the exchanges between Gilman, the top scientific officer, and Cobbs, the Commercialization officer, below:

Gilman: Why do we think people who cannot write a decent application can run a decent program? And if we hire one consultant to work with all of the applicants do we not end up with proposals that look more alike than different?

Cobbs: I fundamentally agree. I’m learning (a difficult process) that therein lies the difference between the private sector and working with public money. We’ve lost the sublime purity of a Darwinian approach and accepted more of a muddled Orwellian outlook; we’re all equal.

Gilman: Well, we are damn well not all equal. What’s the point of evaluating proposals if that is the assumption? It’s also unfair to extend deadlines for [requests for applicants] (as opposed to meeting abstracts). You penalize those who did their work and got it on time to favor those who were either too disorganized or too incompetent to do it....We are all equal means stooping to the common denominator and that is a sure way to fail at commercialization and to fail utterly in making any progress against cancer. The B team or worse (the C team) does not make progress in this intensely difficult and competitive area. If this is truly the consequence of working with public money then I’d rather go fishing.

November 29, 2012 - Based on the reporting by the Dallas Morning News, the Progress Texas PAC called for an investigation into the use of CPRIT funds - prompting Governor Perry's office to lash out at "conspiracy theorists" calling CPRIT into question. From the Texas Tribune, "Ethics Commission Backs Off Investigative Power Plan":

The Progress Texas Political Action Committee cited investigative reports by The Dallas Morning News, which has found that millions of dollars in grants and awards from the Cancer Prevention Research Institute of Texas, the Emerging Technology Fund and the Texas Enterprise Fund have gone to the governor's friends and campaign donors. In the case of the cancer institute, several high-profile scientists have resigned in protest, saying they fear politics is playing a role in the awarding of cancer research grants.

“Taxpayers have a right to know if there is something worse than bad judgment at work in this process,” said PAC director Glenn Smith. “The numbers clearly indicate the best way to get Texas to invest in your business is to make a nice campaign donation to the governor.”

Perry spokeswoman Catherine Frazier said criticism of the programs was the work of "conspiracy theorists."

"Blanket attacks on our state’s successful incentive programs fail to understand that they are authorized, overseen and held accountable by the members of the Texas Legislature, and follow detailed compliance and reporting requirements as outlined by lawmakers," Frazier said.

December 3, 2012 - The questionable CPRIT funds led to both Progress Texas PAC and Texans for Public Justice to seek further investigation into how CPRIT is managing their funds. From the Texas Tribune:

Eight scientists — including Dr. Alfred Gilman, a Nobel laureate and former chief scientific officer of CPRIT — resigned from the program this year, alleging suspicions of favoritism and systematic abuses in the grants process, according to The Associated Press.

In a letter to the U.S. attorney in San Antonio on Monday, Craig McDonald, the executive director of TPJ, alleged “potential impropriety and possible illegal activity surrounding the awarding of taxpayer funded grants to private companies,” by the state’s grant programs, including CPRIT. Progress Texas also sent a letter to the Travis County district attorney’s office asking for a similar investigation.

“At the least, these connections between grant recipients and the state’s political leaders raise serious conflict-of-interest issues,” Craig McDonald, the executive director of TPJ, wrote in the letter. “At worst, they could cross lines of legality.”

The biotech company that bypassed normal peer reviews to win an $11 million state cancer grant had the kind of political connections that make such independent reviews indispensable.

Breaking the story on Peloton Therapeutics’ irregular grant last week, the Dallas Morning News reported that Peloton investor Peter O’Donnell of Dallas contributed more than $440,000 to Governor Rick Perry and Lieutenant Governor David Dewhurst since 2000. These officials control most appointments to the grantmaking Cancer Prevention and Research Institute of Texas (CPRIT).

Peloton’s political connections go beyond O’Donnell. The company has close personal and technological ties to Dallas-based UT Southwestern Medical Center. A political action committee affiliated with that hospital has invested $228,250 in state politics since CPRIT’s birth in 2007. It gave 20 percent of these funds to Perry and Dewhurst, who are the PAC’s favorite politicians. Meanwhile, the top 12 contributors to Southwestern Research & Medical PAC have contributed $211,000 to House Speaker Joe Straus, $612,734 to Dewhurst and $986,078 to Perry just since 2007.

A report by Patricia Vojack, who was appointed in August as CPRIT’s compliance officer, says Dr. Alfred Gilman, the agency’s former chief scientific officer, and Jerald “Jerry” Cobbs, the former chief commercialization officer, exchanged emails in 2010 about the proposal from Peloton Therapeutics. But she said those emails are gone, and she didn’t know what happened to them.

CPRIT’s compliance officer said two former high-ranking agency officials and a business expert who reviewed grant applications had written emails about Peloton Biotherapeutics in 2010. The compliance officer, Patricia Vojack, said in a report: “None of these emails are currently available.” She did not elaborate.

Peloton, based at the University of Texas Southwestern Medical Center, was approved for a grant without the required scientific or business review. Mansour has instructed CPRIT staff to “employ whatever professional forensic effort is necessary to locate these emails so that their contents will be known,” he disclosed Thursday in an email to The Dallas Morning News. [...]

Glenn Smith, a director of the Progress Texas Political Action Committee, said in a statement: “Revelations about the disappearing emails raise suspicions that officials at the beleaguered agency are destroying evidence in advance of criminal and legislative investigations.”